President Barack Obama expected to issue executive order to restructure overtime compensation

The proposed executive order by President Obama would affect those working in fast food restaurants, retail stores and other businesses. Reuters

President Barack Obama is expected to issue an executive order to raise the wages of millions of Americans. The order would tackle the rules regarding who qualifies for overtime payments, Bloomberg reported.

Despite continuous opposition from Congressional Republicans, Obama is expected to lift the threshold for those who do not qualify for overtime because they are considered mangers. According to Bloomberg, members of the Department of Labor are urging Obama to lift the threshold to $51,000 (£33,917), while 26 Democratic senators are calling for a threshold of $56,680.

Ohio Senator Sherrod Brown said: "This is absolutely one of the best practically ways to give people the on-ramp to the middle class. When you strip people of their overtime pay, which is what's happened over the years, they really don't have a chance to get ahead: They're working harder and harder and not seeing real pay increases."

"This is absolutely one of the best practically ways to give people the on-ramp to the middle class."

- Ohio Senator Sherrod Brown

However, Republicans maintain that the executive action could force businesses to cut employment or close down. Bloomberg reported that Tennessee Senator Lamar Alexander criticised the expected measure as an economic move "engineered to make it as unappealing as possible to be an employer creating jobs in this country".

Other critics say that a change in rules could force employers to reconsider their supervisory structures, slash entry-level management positions and reduce flexibility for managers. David French, the senior vice president of government relations for the National Retail Federation told Bloomberg, "It's likely you would see fewer managers and assistant managers and more hourly workers. Fewer slots for restaurant managers would limit career advancement."

The current overtime cutoff salary is $23,660. According to Bloomberg, that covers 11% of salaried employees.